Short transcript from Jason M. Lemkin advising founders on acquisition-readiness: M&A interest mainly targets SaaS companies with revenue north of $20M that are near break-even, high Net Revenue Retention (NRR), and solid growth; private equity will buy such companies as financial plays. The clip offers a 'cheat code' threshold (≈$20M+) and conditions (≥100% NRR, break-even, category-established).
What should founders be thinking about for founders? Well, look, I do think M and A is definitely for companies that are north of 20 million in revenue that are not burning a lot of money. Like the logical example from two weeks ago, there's a lot of M and A interest for a variety of reasons. There's a ton of interest from private equity firms. Private equity firms will buy any SaaS company with high NRR that are break even north of 20 million. Like if you get to 20, here's a cheat code for founders, okay? If you're in any well established category, anything that's established and you hit 20 million, you're growing even just 30% and you have over 100% NRR and you're break even, someone will buy you as part of financial engineering.
